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2021 Outlook

European banks – stress tested

From financial-crisis villain to Covid-crisis solution – the proven resilience of European bank credit fundamentals, combined with the prospect of a more favourable operating and regulatory environment, suggests to us that bank capital is a meaningfully mis-priced asset class.



There has been a profound strengthening of banks’ credit fundamentals, ensuring they remained resilient through the pandemic, providing financing to households and corporates. In fact, policy authorities turned to banks to become part of the solution to the Covid-19 induced economic crisis, rather than labelling them as part of the problem.

Our asset-class outlook is positive from a fundamental and valuation perspective, but active investment skill is required to select the most attractive instruments.

Download the European banks – stress tested PDF

To find out about David’s three other investment trends for 2021, click here.